A tale of two Obamacare price changes

A woman looks at the HealthCare.gov insurance marketplace website in Washington.

It's the most moderate of times for Obamacare premiums, or it's the most financially pressing of times—depending on your perspective.

About two weeks before Obamacare's second open enrollment starts, there is even more evidence that health-insurance premiums for plans sold on government-run marketplaces will be only modestly higher, on average, than what plans on those exchanges cost last year.

But another new report shows average individual insurance market prices in 2014 saw double-digit percentage increases from their pre-Obamacare levels, regardless of whether the customer was a man or woman, old or young.

Tale 1: Health insurance market is 'stabilizing'

The first set of data comes from PricewaterhouseCoopers' Health Research Institute, which since the summer has kept track of individual insurance premium rate filings in all states for 2015 plans, which go on sale Nov. 15.

In an update this week, PwC said the average proposed premium for such plans is 6 percent higher than last year in 41 states and the District of Columbia. The average premium will be $381 per month, PwC said.

So far, D.C. and seven states have announced final rates. The average increase is 3.5 percent, with an average premium of about $344. Those seven states are Colorado, Maryland, New York, Ohio, Oregon, Rhode Island, and Vermont.

PwC noted the actual premiums charged vary widely among individual plans issued by insurers—with as much as a 22-percent decrease, or as high as a 35-percent increase, both of which were seen in Colorado plans.

The rates do not reflect the effect of federal subsidies that most people who buy insurance on government-run exchanges such as HealthCare.gov receive due to having low or moderate incomes. People who buy health plans outside the exchanges do not, as a rule, get such subsidies.

"The 2015 proposed rates are encouraging because consumers have many choices and are not seeing big, double-digit hikes across the board," said Ceci Connolly, managing director of PwC's Health Research Institute. "It is also good news for consumers that more insurers are selling more products in more states."

"In most states, residents have a number of choices, and it will definitely pay to shop around."

Connolly said she is "not surprised" that the average price increase for most states remains around 6 percent "because it's comparable to what we're seeing in the employer-based insurance market." The employer market is where most Americans get their health coverage.

"That's all good news," she said. "It means the health insurance market is stabilizing a bit and beginning to act more like a rational economic sector."

But while the averages that PwC is seeing are moderate, some people who bought individual plans as part of Obamacare's launch last year are feeling a pinch. That's particularly true if they don't received subsidies, which often significantly reduce costs for customers of the government-run exchanges.

Tale 2: 2014 saw steep increases

In analysis published this week, the website HealthPocket.com compared the average premiums people paid in 2013, before Obamacare plans went on sale, to 2014 plan prices. HealthPocket looked at premiums paid by non-smoking men and women, ages 23, 30 and 63, in all 50 states and Washington, D.C.

"HealthPocket found that the average health insurance premium increased by double digits for each group examined, though some groups saw a much steeper increase than others," the report said.

For 23-year-old non-smoking men, the average premium for all plans jumped 78 percent in 2014, the report said. Women of the same age saw a 45-percent hike.

For 30-year-olds, the increases were 73 percent for men and 35 percent for women. Only the 63-year-old age group saw bigger price hikes for women, with females paying 37.5 percent more for insurance on average in 2014, and men paying an average of nearly 23 percent more.

"Even as a health-care expert I was very surprised at these results," said Kev Coleman, HealthPocket's head of research and data. "I hadn't expected it to be as high as it was."

Coleman said he was particularly struck by how high the percentage increases were for young adults. He said it raises the question of "whether this contributed to the low rates of enrollment for younger adults."

Young adults make up around 40 percent of the uninsured, who are the main target group for the Affordable Care Act. But they only account for about 28 percent of enrollment on the government-run ACA exchanges this year.

When asked about the dramatically higher rates under Obamacare, PwC's Connolly said, "It's just impossible to compare the ACA exchanges with the pre-ACA individual market, which, by the way, was not a market at all. It's really just apples and oranges."

Connolly noted that before Obamacare, "individuals could be charged sky-high rates or even denied coverage" if they had pre-existing medical conditions. That's no longer the case." She also pointed to the subsidies that reduce costs for most exchange enrollees, and caps on what people can be forced to pay out-of-pocket for health services.

HealthPocket acknowledged those differences from 2013 to 2014 in its report, and also noted that Obamacare now mandates certain minimum health benefits that must be covered by plans with no cost-sharing by enrollees, such as contraception and preventative care.

But HealthPocket's Coleman said, "You can't just say it's an apples to oranges market for a consumer of health insurance."

"It's a product they're going to buy or not going to buy," Coleman said. He said that people made insurance choices before Obamacare based on affordability and how plans met their health needs, as well as other factors that they valued.

"So we have to be careful of being dismissive of the pre-reform market and imagine they were all 'junk plans,' " Coleman said. "That is clearly as much of an unjustifiable position as to say all the plans in the new market are too expensive."

Coleman also said that while Obamacare advocates are "quick to say" that most enrollees get subsidies if they buy exchange-sold plans, "it's more complicated than that."

Some people are not eligible for the subsidies because they earn too much—the subsidies as a rule are available to people earning between one and four times the federal poverty level, or $11,670 to $46,680 for an individual. And in some places, an available health plan's premium may not be a high enough percent of the customer's income to trigger the right to a subsidy.

A previous HealthPocket study of eight cities found that the income range for adults ages 18 to 34 was 41 percent lower than the income range dictated by the Affordable Care Act. In other words, it took significantly less income to reach the point where the subsidy amount decreased to zero.

And, Coleman noted, if someone buys off-exchange plans, they get no subsidy, and therefore would feel the full impact of the price increase.